Effectiveness of financing statement if new debtor becomes bound by security agreement

Checkout our iOS App for a better way to browser and research.

  • (a) Financing statement naming original debtor. Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have been effective had the original debtor acquired rights in the collateral.

  • (b) Financing statement becoming seriously misleading. If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under subsection (a) to be seriously misleading under § 9–506:

    • (1) the financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under § 9–203(d); and

    • (2) the financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than four months after the new debtor becomes bound under § 9–203(d) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.

  • (c) When section not applicable. This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under § 9–507(a).


Download our app to see the most-to-date content.